April was a brutal month for tech stocks due to widespread technology sell-offs, but May is looking more versatile. A late rally in big technology stocks brought the major indexes around by the end of the day Monday. The Associated Press has the story:
Facebook’s parent company and chipmaker Nvidia each rose more than 5%
NEW YORK (AP) — A late rally in big technology stocks erased an afternoon slump on Wall Street and left major indexes moderately higher. The uneven start to May followed a brutal April in which widespread technology sell-offs dragged down major benchmarks. Facebook’s parent company and chipmaker Nvidia each rose more than 5%. The S&P 500 ended up 0.6% higher. It was down as much as 1.7% earlier. The Dow Jones Industrial Average rose 0.3% and the Nasdaq aded 1.6%. Bond prices fell. The yield on the 10-year Treasury rose to 2.99% and briefly traded at 3% for the first time since late 2018.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Stocks fell broadly on Wall Street in afternoon trading Monday for a shaky start to May following a brutal April in which widespread technology sell-offs dragged down major benchmarks.
The S&P 500 fell 1.4% as of 2:37 p.m. Eastern, with the pullback gaining momentum into the late afternoon. The Dow Jones Industrial Average fell 446 points, or 1.4%, to 32,530 and the Nasdaq fell 0.8%.
Household goods companies and retailers had broad losses. Procter & Gamble fell 2.4% and Amazon fell 3%.
Technology stocks also fell and added more weight to the market’s drop. Many companies in the sector have pricey stock values and therefore have more force in pushing the major indexes up or down. Apple fell 2.5%.
Several big communications companies gained ground. Facebook’s parent, Meta, rose 1.4%.
Smaller company stocks also lost ground. The Russell 2000 index was down 1.2%.
The weak start to May follows a dismal April, where Big Tech companies dragged the broader market lower as they started to look overpriced, particularly with interest rates set to rise sharply.
U.S. crude oil prices were relatively unchanged after slipping earlier in the day. European energy ministers are meeting in Brussels to discuss Russian supply issues and sanctions. Russia’s invasion of Ukraine prompted a jump in already high oil and natural gas prices.
Bond yields rose significantly. The yield on the 10-year Treasury was at 2.98% after briefly rising to 3.00% from 2.89% late Friday. It hadn’t been above 3% since Dec. 3, 2018, according to Tradeweb.
Treasury yields have been rising all year as investors prepare for higher interest rates. Markets are expecting an extra-large interest rate increase this week from the Federal Reserve as it tries to tame inflation, which is at its highest level in four decades.
The central bank is expected to raise short-term interest rates by double the usual amount when it releases its latest statement on Wednesday. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.
Rate hikes from the Fed will further increase borrowing costs across the board for people buying cars, using credit cards and taking out mortgages to buy homes. Investors have been concerned about rising inflation and its impact on businesses and consumers. But, they are also concerned about how the rate hikes will play out in fighting inflation and whether a more aggressive Fed could actually hurt economic growth.
Concerns about rising inflation have also been hanging over the latest round of corporate earnings. Disappointing results or outlooks from Apple, Google’s parent company and Amazon helped fuel the selling last week. Investors are reviewing the latest results and statements to gauge just how heavily rising costs have impacted operations and whether price hikes have hampered sales.
Wall Street is in for another busy week of earnings reports. Expedia and Clorox are among the many companies reporting their results later Monday. Pfizer reports results on Tuesday, CVS Health reports results on Wednesday, and Kellogg reports results on Thursday.
By DAMIAN J. TROISE and ALEX VEIGA
